Apple Subscription Policies, HTML5 Could Drive Publishers Elsewhere

Apple's in-app subscription policies, paired with the rise of alternative content-distribution platforms, could drive publishers to look for other distribution channels.

Apple is walking back its controversial policy regarding
subscriptions sold via the App Store. But how will publishers actually react?
Under Apple's previous terms, media publishers were required
to sell subscriptions through the App Store at rates preferable or equal to
those offered via other channels, with Apple taking 30 percent of the fees.
Under the revised terms, publishers can offer in-app subscriptions at any price
they desire, and aren't required to offer an in-app subscription simply because
they offer one outside of Apple's ecosystem.

Publishers hadn't exactly made their peace with Apple's
initial policy. "We would not be able to offer our service through the iTunes
store if subjected to Apple's 30 percent monthly fee vs. a typical 2.5 percent
credit card fee," music-subscription service Rhapsody wrote in an emailed
statement to eWEEK in February, soon after the policy announcement. That
irritation was echoed publicly by other companies.

Though Apple's revised the policy, publishers could be
taking another look at how they distribute their content to audiences. A recent
report by Forrester analyst Nick Thomas, for example, cites the Financial
Times' decision to launch an HTML5 web application in order to deliver content
to multiple devices, all while maintaining a lock on the customer relationship.
"Faced with the challenge of delivering multiple versions of
the same content and with what they see as the punitive terms and conditions of
some platform providers," Thomas wrote in the report's executive summary,
"other publishers are keen to see if the FT model offers a way forward."
Despite that publisher interest, he added, "HTML5 is not yet
appropriate for mainstream adoption. But the FT's initiative is an important
salvo in the battle over the future of paid apps."

Even with its revised policy, Apple could still cause
turbulence among publishers.
"While publishers figure out their next steps for their
content apps, there's one app that no one is talking about but I believe
everyone should have their eye on. It's the Amazon Kindle app," James McQuivey,
an analyst with Forrester, wrote in a June 13 blog posting. "This app violates
even Apple's revised policies and will soon face a day of reckoning when
Apple's June 30th deadline for compliance comes up."
In order to sidestep any issues, Amazon should consider
releasing a Kindle app that hews to Apple's new policy, only without a built-in
"Buy" button: "Instead, it should be positioned as a Kindle reading app where
people who have purchased Kindle books elsewhere can read them on an iOS
device." Furthermore, Apple "should just let these readers know" that the
changes are the result of Apple's rules.
On top of that, he added, Amazon should "release an amazing
HTML5 -app' that gives Kindle readers everything Amazon has to offer," which
could open doors to "include Netflix-style video streaming, paid VOD [video on demand], and its cloud music service."
The ultimate result would be a platform capable of rivaling iTunes for breadth
of product.
Other Apple rivals have tried to exploit the potential
schism between the company and publishers. In February, soon after Apple
announced its original publishing policy, Google announced Google One Pass, a
service that the search engine described as letting "publishers set their own
prices and terms for their digital content," with Google taking 10 percent of
any revenue.
In other words, despite the popularity of the App Store as a
content platform, publishers will likely continue to feel out their options.

Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.